A new study by BIA/Kelsey [1], Chantilly, Virginia-based adviser to companies in the local media space, says that U.S. mobile local advertising revenues are expected to grow from $404 million in 2010 to $2.8 billion in 2015.
According to BIA/Kelsey, locally targeted mobile ads will represent 70% of overall U.S. mobile ad spending in 2015.
The figures were released as part of BIA/Kelsey’s five-year outlook for U.S. mobile local advertising. According to the firm, total U.S. mobile ad spending will grow from $790 million in 2010 to $4 billion in 2015. During the same period, BIA/Kelsey projects the local portion of that total to increase from $404 million to $2.8 billion. This makes locally targeted mobile ads 51% of overall U.S. mobile ad spending, growing to 70% by 2015.
Consistent with other local media, BIA/Kelsey defines mobile local advertising as that which targets users in specific locations or contains location-specific calls to action.
Among the drivers of mobile ad revenue growth are: smart phone penetration, mobile web usage and related increases in ad inventory. BIA/Kelsey expects this to come about as large brand advertisers evolve their campaign objectives to the capabilities of the mobile device – most notably, location awareness. The firm also sees mobile advertising moving down market to small and medium-sized businesses through a combination of local sales and self-serve tools.
Exploding mobile usage, clearer ROI and a shorter purchase funnel will accelerate this demand within display, search and SMS advertising formats, it says.
“Revenues will grow from not only ad volume, but also premiums placed on location-targeted ads,” said Michael Boland, senior analyst and program director of BIA/Kelsey’s Mobile Local Media practice. “These premiums result from higher performance for locally targeted mobile ads when compared with non-local ads, due to higher relevance, immediacy and consumer buying intent, all of which are more prevalent in mobile than many other print and digital media.”
BIA/Kelsey’s full U.S. Local Media Annual Forecast (2010-2015) is available to clients of BIA/Kelsey’s Mobile Local Media advisory service, which provides research and analysis of the geolocal advertising opportunity, including content, delivery and advertiser adoption.